What is the best way to get a loan?

Question

Need help.. I would like to get a loan. But i have one red flag. My credit is good over 670 and no credit cards or loans. Im told I have to wait because of the red flag? Is this true?

Please help or guide me.. Thank you

Paul Crutcher · Answer

I had a good and long conversation with a loan officer recently trying to get a luxury loan to get an RV. I had a couple of issues getting a loan sadly and couldn't start that business, but the advice she gave is pretty universal. FICO looks for secured loans, so auto and home loans. Those would be where I would start.

You could take your car title to your bank and request a 50% equity loan of the car or whatever is affordable for a monthly rate for you and build your credit that way. Otherwise, a credit card would be suffice to boost you over the 700 mark. But unsecured loans, such as personal loans and credit cards, aren't looked on as highly as secured loans like the ones aforementioned.

I don't yet have a real estate loan, so I could never reach my highest potential credit score But i'm working to get my dti down through my current service business to get approved for an FHA.

My biggest advice for you is to just be on time with payments and make double payments on months when you can.

Best of luck!

Stephanie Medellin · Answer

@Henry Argueta  I would go for a secured credit card if no other cards will approve you.  You start with a small limit (sometimes as little as $300) and provide a deposit, but as you use it and pay it back, they will report to the credit bureaus to help boost your score.  Definitely start this ASAP, since it will take some time to develop a good payment history.  Most importantly, be sure to pay on time every month.  You do not want to show ANY negative credit history or late payments after a bankruptcy.  A month or two before you're ready to try for a pre-approval, make sure your balance is only a very small percentage of the credit line for each card.  Even if you pay your balance in full each month, the amount listed on your monthly statement is the balance that will be reported.  If you are actively using your card and getting close to the limit, be sure to make a payment BEFORE the statement closes for the month.  This is also important, because your score will be lower if you use a higher percentage of your credit limit.

Daniel Hennek · Answer

Firstly, don't make correlations between auto loans and real estate loans. FICO doesn't "look" for anything, it stands for Fair Isaac Corporation. FICO has become a term used by many people incorrectly, it's just a credit score model and there are many now a days. We don't call a Chapter 7 BK a "red flag" in the mortgage world. A red flag is something that needs to be investigated to determine if there is mortgage fraud or not, it happens all the time. Address discrepancies, different SSN's showing up on the credit report, etc. Red flag does not refer to derogatory credit, so if you heard that from a loan officer they must be new and probably don't know much.

Most loan programs require some kind of waiting period for anyone who's had a BK. Some do not if you have a big down payment and will take a high rate. 670 is middle of the road credit, but with a recent chapter 7 you're actually doing pretty well there. You probably spoke to someone quoting FHA guidelines to wait 2 years from discharge to qualify.

Most loan programs require some kind of waiting period for anyone who's had a BK.  Some do not if you have a big down payment and will take a high rate.  670 is middle of the road credit, but with a recent chapter 7 you're actually doing pretty well there.  You probably spoke to someone quoting FHA guidelines to wait 2 years from discharge to qualify.

Stephanie Medellin · Answer

@Henry Argueta  Awesome news!

Henry Argueta · Answer

@Stephanie Medellin

Stephanie you're the best!

I cannot thank you enough. I got a card with minimal of 200 bucks thru the link you provided. Thank you for your guidance. One step closer to getting my loan / home.. 💖

I appreciate you very much! 🙏

Stephanie Medellin · Answer

@Henry Argueta  That's understandable, but I don't think you need to worry about approval with these cards.  I believe you have to give a deposit equal to the credit line, so you can't really be denied for a less than perfect credit history.

Discover has a secured card, and it can be converted to a regular card:

https://www.discover.com/credi...

Henry Argueta · Answer

@Stephanie Medellin

May I kindly ask or recommend me a company i can apply. I'm already mentally scared to apply, because of the amount of times I have been rejected.lol.

Henry Argueta · Answer

@Daniel Hennek

That is correct. Now how can I boost my credit score?

If I get denied each time a apply for a credit card?  Can you guide me please.

Henry Argueta · Answer

@Stephanie Medellin

Also to answer your question. It's a discharge...

Henry Argueta · Answer

@Stephanie Medellin.

Yes the loan officer mention it as a red flag. reason I'm using that term in my conversation.

The goal is to get and FHA loan as it only requires a 2yr waiting period which be by Oct this year 2021. Now the next step they mention is to get credit card. BUT! I apply and i get reject each time. I assume is because the chapter seven. I want to built my credit more get my credit up to the 700 mark. But it will not allow me to get any type of credit card. Can I please get guidance on this piece? What is the best way to go forward asap.. 😢

What is the best way to get a loan?

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